Paying for Health Care — One Baby Step at a Time?

This jumped out at me:

Albany forum told that new programs in Massachusetts, Maine carry expensive costs 

It’s November. Agencies are working on NY State budget proposals. Input is being inputted as we speak. Input like this:

Reducing the number of people who don’t have health insurance is an expensive and complicated task, said speakers from states that have adopted sweeping health care reforms.

Celia Wcislo, a player in Massachusetts’ health reform, poked a hole in the dreams of anyone who believes universal health care will save money.

“It costs twice as much to insure people than paying for the sick ones who show up in hospitals,” Wcislo said.

Wcislo spoke Wednesday at the Rockefeller Institute of Government’s forum called “Achieving Universal Health Care Coverage in New York: Lessons From Maine and Massachusetts.” Wcislo, a member of the 10-person board responsible for redesigning the Massachusetts insurance system, and Elizabeth Kilbreth, a Maine professor who has studied Maine’s reforms, shared their experiences and observations from their home states.

Well, sure it’s expensive insuring people —  especially through private insurance, where there are such high expenses, what with marketing, paying people to deny coverage, and compensating top executives. And I’ll bet it would cost Massachusetts a lot less if they just didn’t bother treating people who show up in emergency rooms without insurance, but that’s the kind of society nobody would want (well not nobody — see below).  

Anyhow, it’s the hospitals also that wind up eating an enormous number of expenses for the uninsured people who do show up. So the “expense” of insuring people (i.e. paying for these people’s care) comes from somewhere. I think what Ms. Wcislo is driving at is that if the state isn’t footing the bill, the expenses aren’t high, as if they didn’t pop up somewhere else.  On to Maine.

Kilbreth, who teaches at the University of Southern Maine’s Muskie School of Public Service, gave an overview of Maine’s reform initiatives: expanded Medicaid and a new state-subsidized insurance plan for small businesses, the self-employed and some uninsured individuals.

About 15,000 people enrolled in the state insurance plan, called DirigoChoice, and 63 percent of the new members were previously uninsured or underinsured. The average household income for people on the plan is $11,814.

The program costs Maine more than $60 million. It is so expensive, Kilbreth said, because the program provides drug benefits and vision care and because health care costs in Maine are so high.

The funding mechanism — an assessment on health insurance premiums — is being legally challenged by Maine insurance companies. The reforms are unsustainable if health care costs for employers and taxpayers are not reduced, Kilbreth said.

Of course you wouldn’t be telling people making $11,814 a year to go buy their own drugs. So what makes the program unsustainable? Obvious answer: states don’t have the revenue coming in to cover the costs.  Why not?  Obvious answer: tax cuts.

If New York wants money for health care reform, the signal from Massachusetts and Maine, in between the lines, is to stop giving away the money.

New York State has engaged in nearly twenty years of experimentation in supply side economics, beginning with the massive tax cut proposal made by the Democratic State Assembly in 1987. This experiment, conducted throughout the nation, is based upon the horribly flawed premise that a dollar into the coffers of government is a dollar lost to everyone else, as if all sectors were not inter-related.

Well, they are inter-related. The state doesn’t compensate hospitals fully for uninsured patients, hospital costs go up. The state cuts income taxes for the rich again and again and again and again, property taxes go up. And local services (remember the good things public schools had 20 years ago and don’t anymore) go down  — anyway.

While the number of uninsured keeps creeping upward, so do costs for everyone else.

According to the Rochester Democrat and Chronicle:

Like the experimental frog who doesn’t respond to the rising temperature of the water around him, many workers with employer-subsidized insurance tacitly accept the incremental growth of their health-care expenses.

… employees’ contribution to health insurance premiums have risen on average by $3.31 a week since 2001, when the average employee share was $659 a year.

… What’s more, according to the study conducted by Hewitt Associates, employees’ deductibles, co-payments, co-insurance payments and other out-of-pocket expenses are also rising.

Hewitt estimates that in 2008, the average employee will spend a total of $3,597 for health care — up from $1,320 in 2001.

That’s an additional $2,277 a year, or $43.78 a week.

We’re all holding this bag, except of course for those lucky enough to have seen their taxes go down significantly over the past twenty years. The obvious solution would be to adjust tax rates to more fair and progressive levels, the way they used to be.

I can hear the halls of government decisionmakers shaking with seismic laughter. “You can’t get away with raising taxes,” they’d say. “Everybody knows that.” They might even point out how then New Jersey Governor Jim Florio raised taxes. He even got a “Profile in Courage” award from John and Caroline Kennedy in 1993 for doing so — just before he got trounced in the election. And one year later, how Newt Gingrich conquered Congress with his Contract on America.

Well, that was then. This is now. We’re all (but a lucky few) sinking into health care quicksand. For crying out loud, the lead propagandist against taxes is Grover Norquist, who famously said “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” This is the same Grover Norquist who once gave this answer to the question “Why shouldn’t the state help the needy?”

“Because to do that, you would have to steal money from people who earned it and give it to people who didn’t. And then you make the state into a thief.”

Memo to all workers for government: Grover Norquist wants to kill your livelihood. You aren’t making things better dancing your let’s-do-the-tax-cut dance while Norquist plays his flute. You’re. hurting. things.

So, any reaction from state agency people to the experts from Massachusetts and Maine? The Times Union reported one.

Deborah Bachrach, deputy commissioner of the state Office of Health Insurance Programs, sat on the panel as a “responder” to the out-of-state speakers. She scribbled notes and asked questions like an eager student.

“This is incredibly interesting,” Bachrach said. “You’ve confirmed for us that this is really complicated and baby steps are the way to go.”

Baby steps? Baby steps? What else in the world has the United States been doing since 1994? Well, she did offer one (baby) step.

Bachrach and other state officials said it was clear that health reform must be combined with cost-containment initiatives, such as creating financial incentives for preventative care.

So while we’re all huffing and puffing on our treadmills, what’s the next step? I’d like to know, because my deductible is jumping 63% next year.

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